Robert Rand, BURN Editor
Two years ago, not long after my family moved to Rome, I purchased a new car at a local dealership. It’s an Asian import – a nice little vehicle that gets pretty good gas mileage and fits into small parking spaces.
But the battery has always been a bit off, so I recently brought the car to the dealership for a check up.
I hadn’t seen Giovanni, the dealership owner, for many months.
“How are you doing?” I asked.
He shrugged. “Well, we are still in business,” he said. “Asian imports are popular. But many car dealers have had to close their doors.”
Thousands, in fact. The number of Italian car dealerships has fallen 31 percent since 2007, from 2,950 to 2,011, including a 7 percent drop last year. Car sales are at their lowest level since 1966.
The global recession is to blame, which has deprived people of jobs and disposable income. Also at fault is Italy’s chronically tempestuous political system, which undermines already shaky consumer confidence.
But if you ask Italian drivers what’s wrong with the automobile industry, you’re likely to hear them talk about the price of gasoline. It averages $8.92 a gallon, making Italy the most expensive European Union country in which to purchase gasoline at the pump.
Fuel prices rose rapidly two years ago, after former Prime Minister Mario Monti took office and made pain at the pump public policy. He imposed a draconian 25 percent tax increase on gasoline in an effort to reduce Italy’s public debt. By the middle of last year, Bloomberg news reported that “Italians were spending more each week to fill their tanks than they do to feed their families.”
High gasoline prices and the concurrent fall off in car sales are two elements of a broader phenomenon: a deep drop in overall energy consumption in Italy. Guido Bortoni, chairman of Italy’s energy authority, reported last month that the global recession has caused energy demand here to drop to 1998 levels, “and shows no sign of recovery.”
In an effort to force down the price of gas, Italy’s service station industry – which has suffered a loss of business because of the high fuel costs – has announced that freeway gas stations will seal their pumps for three days this month, July 16 – 19. In a statement, the industry said service station “managers are being fired and consumers are paying for the most expensive gasoline in Europe.” The pump lock down aims to draw public attention to what the industry calls Il “Bottino” del carburanti in autostrada – “Fuel booty on the motorway.”